Feds confirm probe into high-frequency trading

Attorney General Eric Holder confirmed that the U.S. government has opened a probe into whether high-speed traders are violating insider trader laws.

Here is Holder’s testimony related to “high-frequency trading” Friday before the U.S. House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies:

“In the financial sector, concerns have been raised recently about a practice called ‘high-frequency trading.’ This practice, which consists of financial brokers and trading firms using advanced computer algorithms and ultra-high-speed data networks to execute trades, has rightly received scrutiny from regulators.

” I can confirm that we at the Justice Department are investigating this practice to determine whether it violates insider trading laws. The department is committed to ensuring the integrity of our financial markets – and we are determined to follow this investigation wherever the facts and the law may lead.”

A book called Flash Boys by Michael Lewis that was published this week chronicles how high-speed traders gain an edge against mom-and-pop investors. It has generated tons of controversy on the practice of high-speed trading.